Powerful fictional storytelling dominates the shortlist of this year's Guardian first book award, announced today, which includes works that range from a portrayal of Alzheimer's to a novel that was the subject of a bidding war between 10 publishers.

Three novels, one collection of short stories and a work of reportage are in contention for the £10,000 first prize won last year by a particularly strong work of non-fiction, Alex Ross's The Rest is Noise.

The shortlist was decided by a judging panel that included the novelist Tobias Hill and broadcaster Martha Kearney and, with one vote, Waterstone's reading groups in Oxford, London, Leeds, Edinburgh and Bath.

Claire Armitstead, the Guardian's literary editor and chair of judges, said the dominance of fiction in the shortlist was not mere coincidence. "It reflects the power of good storytelling and is a reminder that, despite regular cries that the novel is a dying art form, it is still the one we turn to – whether to explore the most troubling areas of society and public identity, or just to switch off and lose ourselves in something beyond our own small lives."

The most familiar shortlisted work might be Samantha Harvey's The Wilderness, which has already won the £25,000 Betty Trask award for first-time young Commonwealth novelists. Kent-born Harvey was also shortlisted for the Orange prize and longlisted for the Booker prize with her poignant story about Jake Jameson, an architect whose memories are being lost because of Alzheimer's.

Also shortlisted is The Selected Works of TS Spivet by American Reif Larsen, which was bought for just less than $1m by Penguin after bidding from no less than 10 publishers. The novel's main character is a genius 12-year-old cartographer from Montana and much of its story is told in the maps and diagrams supposedly drawn in the margins by Spivet.

Most of the books on this year's list divided opinions – often dramatically – among members of the Waterstone's reading groups, and this was certainly true with Larsen. The Oxford reading group, in particular, fell in love with it: "They wanted it to go on forever and were astonished that a first novel could be so assured and accomplished."

The third novel is New Zealander Eleanor Catton's The Rehearsal, which has already acquired something of a love it or hate it reputation. The novel has two linked narrative threads: one set in a girls' school in the aftermath of a pupil-teacher affair and the other in a drama school where details of the affair are used for the end-of-year production. The Bath reading group praised Catton's writing style for its originality and accessibility, while one Oxford reader remarked: "At last! A book to get lost in."

The other fiction is a collection of 13 short stories by Petina Gappah, a Zimbabwean who has spent the last 10 years working as a trade lawyer in Geneva. She began writing seriously after suffering what she called a "severe depression." In an interview with the Guardian earlier this year, Gappah said: "It was one of those early mid-life crises really. I started asking myself 'What is it that I want from my life?' This question kept haunting me: 'Do I want to be a lawyer who always wanted to be a writer, or do I actually want to be a writer?'"

The result of that inner torment is An Elegy for Easterly, 13 short stories that show different aspects of Zimbabwean life from the shanty towns to the mansions but which also have universal resonances such as betrayal.

The lone work of non-fiction is A Swamp Full of Dollars by Financial Times journalist Michael Peel, which tells the chaotic story of Nigeria and its oil. The book was particularly liked by the London reading group, which was impressed by its accessibility, insight and integrity.

Waterstone's Stuart Broom, who represented the reading groups, said the strongest debates this year had surrounded non-fiction titles and the question of what makes great writing. "We had such a strong non-fiction winner last year it seems almost inevitable that the pendulum would swing back and we'd find fiction dominating the shortlist."

The Guardian first book award began 10 years ago, replacing the Guardian fiction prize created in 1965. This year's judges also include the author Nadeem Aslam, the political philosopher John Gray and the Guardian deputy editor Katharine Viner.